AA Fuel for Thought Campaign

Cost of motoring rises 11% - double for rural 4x4s

9 May 2008

Soaring fuel prices, heavy loss of resale value and increased insurance costs have sent the average cost of running a car in the UK up 11% in the past year, AA Motoring Costs 2008 reveal. Farmers and rural drivers with 'workhorse' 4x4s have seen their costs rise more than 22%.

Mondeo man , who was last year paying £5,611 to keep his petrol car on the road for a typical 10,000 miles, now needs to find £6,256 a year. The 11.5% increase, which is even greater than the eight per cent rise in 2005, has added a further 6.45 pence per mile to the cost of running a larger family car.

Since last year, the tally of extra costs for a large family car owner includes an 18.4% increase in the price of petrol, nearly six per cent extra lost in resale value and a six per cent increase in insurance costs. The loss from money tied into the value of the car and not available for investing has gone up 48%.

However, these extra costs are dwarfed by those for larger 4x4s and luxury vehicles, which have gone up by nearly a quarter. Although many are prestige vehicles for rich drivers, those favoured as rugged all-weather and high-load vehicles in rural communities are costing their owners considerably more per mile than last year, up 21.44 pence per mile for diesel and 21.76 for petrol.

Much of the increase comes from both higher road tax, at £400 nearly double last year's, and the effect this has had on resale values, knocking off on average an additional 25% - even for normally depreciation-resistant diesel models. This doesn't bode well for many high-value executive cars and smaller 4x4s that have seen motoring costs rise by only five per cent this year. With road tax to rise £60 for some and £100 for others by 2010, the effect on depreciation could mirror the trauma suffered by the owners of larger 4x4s.

Edmund King, president of the AA said: "Mondeo man has been hit with increased car running costs which are four times the rate of inflation. Many drivers are finding themselves in a negative equity trap with vehicles that they can not afford to run and cannot afford to sell. Retrospective road tax changes and tax hikes at the top end mean that costs have escalated.

"Our 'AA Fuel for Thought' campaign is calling upon the government to look again at retrospective road tax and, at the very least, abolish the promised two pence per litre duty increase promised for October. Car dependent motorists, the elderly, disabled and rural motorists just have to pay the increased costs and cut back on other household expenditure. Mondeo man is far from happy."